Knowledge is Power at Sanuk

A sales rep walks into a store knowing less about how well products are selling than the retail customer - clearly, that rep is at a disadvantage. That's the scenario that the California-based sandal and shoe maker Sanuk found was crimping its sales.

 

The 8-year-old company got its start selling sandals to specialty surf shops, offering "comfort technology" to its wearers. By expanding its product line and adding major sporting goods and outdoor retailers such as Zappo's and REI as customers, Sanuk's sales soared to almost $20 million in 2007. Its target customers, however, haven't changed - surfer guys and gals, ages 15 to 30, who love the brand's unique styles. To market its footwear, which retails from $13 to $44, the company pairs each sandal with an athlete who is well known to its customers.

 

Sanuk, which means "pursuit of happiness" in Thai, knew its product development and marketing approach was dead-on, with sales nearly doubling last year. But it needed to arm its 18 sales reps with detailed, current information such as customer and sales history, order status and real-time inventory.

 

Searching for a solution

Many of Sanuk's retail customers had invested in point-of-sale systems to keep close tabs on what was selling in their stores. "With knowledge you have power, and that power had gradually shifted over to the retailer," says Dac Clark, Sanuk's CEO. "We were sending our reps FedEx packages with a lot of information and reports that probably none of them read because it was voluminous data."

 

Systems At A Glance

• Accounting: Global Accounting System
• Design/Product Development: AppealMaster
• ERP: Computer Generated Solutions (CGS)
• Sales Force Automation: RepSpark Systems

 

The firm tried a system that was developed for the golf industry, but struggled with data loss, and couldn't find a better solution. "There are so many software solutions out there for product development and marketing, but very few on the sales side. We looked around to find something and there wasn't anything out there," says Clark.

 

Then the consultant who created Sanuk's web site mentioned that he had created a stand-alone, bolt-on system for a sportswear manufacturer that might fit their needs. "We looked at it, and saw the basis of a system that could really give our sales reps robust information," says Clark. Sanuk began working with the consultant and RepSpark Systems to improve on the existing sales force management system.

 

Initially, sales reps were worried about additional work, but after a one-time training session at a sales meeting, they saw how simple the pointand- click system was. "It was amazing how little time it took to train them. If you can buy a shirt online, you can work with the system," says Clark. "We don't want our guys to be tech reps, we want them to be sales reps."

 

Orders are more accurate
Previously, there were significant problems with handwritten orders that were incorrectly entered. "Now you can't put an order in a delivery window that is wrong for that style," says Clark. In addition, orders come in immediately because they are done online, and can be automatically emailed to the customer. This saves the sales rep time and satisfies the customer, leaving Sanuk as a preferred vendor.

 

Without the need to re-enter information, Sanuk was able to reduce its customer service team by 50 percent, freeing up the remaining employees to focus on retail customers instead of order entry. "We were able to pay for the system with that cost savings alone," says Clark.

 

Also, under the previous method, sales reps occasionally entered in the wrong prices, resulting in retailers' getting products at lower costs. Sometimes they would transpose style numbers: "Then we would have to call to find out what style they meant to enter, or worse, it was a valid number so it would be entered incorrectly," says Clark. "No matter how we much talked to them, we had to edit about 20 percent of the orders that came in."

 

Other times, reps would write a single order for multiple styles even though some were available for a later delivery window. "We would have to tell the retailer that their goods weren't coming in until a month later than they were promised," says Clark. Now, reps have to split orders with different delivery windows, and aren't able to book a product unless it's available.

 

A better, more responsive sales territory planning process is now possible. Before, computer reports were sent to sales reps for each of their accounts, resulting in a lot of back-and-forth discussion about goals for that season between the rep and manager.

 

The rep would be given an overall goal: For example, a 25 percent sales increase in his or her territory. The rep would have to guess which accounts would have a greater increase and which were too mature for this increase.

 

"Many of the reps would just pencilwhip a 25 percent increase down the line when this really was not possible," says Clark. "Many of the reps would just pencil- whip a 25 percent increase down the line when this really was not possible," says Clark. Now, the goal for each account is computed automatically, which eliminates the guesswork, and also means that the information doesn't need to be re-entered into a spreadsheet.

 

The sales rep now has historical reports to create more detailed and realistic goals during the territory planning phase. "All necessary information to create an accurate plan is right in front of them at the click of a button," says Clark. "The information can be discussed and viewed by both manager and rep, to efficiently move forward."

 

Future plans
Now Sanuk is looking to get even more out of the RepSpark solution. A businessto- business component will allow retailers to enter their own reorders, eliminating the need for the sales rep to come and take inventory. "A lot of retailers have very sophisticated inventory systems and the buyer will now be able to place their own order, rather than having to go through the rep," says Clark. "That could mean having product in store immediately, rather than in five or six days."

 

Looking ahead, Sanuk plans to invest in a new PLM system, increase its business with shoe stores and expand its kids' line. When all that happens, its sales reps will be ready. "They do a much better job now when they are face to face with the buyer," says Clark.

 

For example, buyers may come in with preconceived ideas of how well a product is selling - or not selling - but this can be countered with hard facts. "The sales rep tells them how fast the stuff sold through, how quickly they are turning their stock, and uses it as a selling opportunity," says Clark.

 

This means more sales for Sanuk, and less for its competitors. "Our sales reps now [are on] equal ground with the retailer," says Clark. As a result, everyone, including the retailers, Sanuk and its sales reps all do more business, he concludes.